Germany Sells $53,000 Bitcoin
Germany sold about 50,000 Bitcoins in July for some $2.8 billion and dumped the cryptocurrency at an average price of $53,000 per coin. But that decision to sell has proved very costly as the price of Bitcoin surged to an all-time high of $93,434. To current prices, the 49,858 BTC sold could be worth more than $4.57 billion, meaning that the country has missed close to $2 billion in revenue.
Selling Due to Legal Mandate
Due to strict national laws in Germany regarding the management of seized assets, Germany was forced to sell. The law requires sale if the market value of the assets fluctuate more than 10%. These laws try to curb risks incurred due to the volatility of markets. The selling was done in batches between June 19 and July 12, putting in multiple bids on sites such as Bitstamp, Kraken, and Coinbase.
Bitcoin Recovered from Movie Piracy Site
The Bitcoin accumulation was first seized from a movie piracy site, Movie2k.to. German law enforcement acquired 50,000 BTC in January this year-the largest seizure of that kind in Germany’s history. Though the sale is very logically based, the move generated controversy about whether this was the right time to do it, considering Bitcoin’s bad reputation with volatility.
Market Response and Bitcoin Surge
Trump Wins; Markets Become Optimistic
The sudden price action of Bitcoin followed the recent U.S. presidential election victory of Donald Trump, fueling speculations about friendlier regulations towards digital or cryptocurrencies.
Joana Cotar, a German Member of Parliament, cautioned that if the United States makes Bitcoin a strategic reserve, that would create an element of FOMO among other European nations.
Supply Dynamics: Analysts Call Attention
Analysts say the real driver of Bitcoin’s recent rally is the supply dynamics of the cryptocurrency following April’s halving. The event cut block rewards in half from 6.25 BTC to 3.125 BTC, thus slashing the rate at which new Bitcoins are entering circulation. Jesse Myers, co-founder of Onramp Bitcoin, has called this a “supply shock,” as more restricted availability is causing demand to increase.
Corporate Demand Adds Momentum
Adding to the bull outlook, MicroStrategy recently acquired 27,200 BTC for $2.03 billion, cementing the enterprise as the largest corporate Bitcoin holder. That deal highlighted increasing institutional participation in Bitcoin, which has led to this unprecedented price increase.
Germany missed out on a fortune indicates how the governments are struggling to navigate volatile assets like Bitcoin under legal constraints.
